EC issued a communication on the Polish economy

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The economical situation rate (ESI) in Poland was 97.1 points in January 2025, which represents a decrease in comparison to 99.1 points recorded in December 2024, stated the European Commission (EC). This means weakening the economical temper at the beginning of the year.

Industry and services under pressure

The manufacture cyclical rate was -16.7 points against -17.2 points in the erstwhile month, indicating a slight improvement in the situation in the sector. In the service sector, however, the situation deteriorated – the rate fell to -5.4 points from -2.3 points in December.

Consumers and retail

Consumer sentiments improved somewhat – the consumer situation rate was -2.7 points against -3.2 points in December. On the another hand, the retail sector recorded a decline in moods, reaching -2.6 points against -1.9 points in the erstwhile month.

Construction sector and labour market

The economical downturn in the construction sector was -16.7 points, which means further weakening compared to -16 points in December. In turn, the employment expectations index (EEI) in Poland remained almost unchanged – 103.4 points against 103.5 points in December.

Comparison with the euro area and the EU

The situation is somewhat better in the euro area. The economical downturn increased to 95.2 points in January 2025 against 93.7 points in the erstwhile month, exceeding the marketplace consensus of 94 points.

A akin trend can be seen across the European Union - the rate increased to 95.8 points in January to 94.7 points in December. The expectations of employment in the EU besides improved, reaching 99,5 points against 98,4 points the erstwhile month.

Historical week for Polish gold

Experts indicate that the last week was historical for Polish gold. After an increase of more than 1%, its value has reached its highest level against the euro in 5 years. The EUR/PLN rate has reached the intellectual limit of 4.20 and markets are observing whether the gold will proceed to strengthen.

Several factors influence the increase in the value of the Polish currency:

  1. Weakening customs concerns – Donald Trump shows a milder approach to China, reducing trade tensions.
  2. Improving Europe’s economical situation – PMI indicators indicate a slight economical recovery.
  3. The influence of the Russian-Ukrainian War – investors presume the continuation of support for Ukraine and the possible end of the conflict.
  4. High interest rates in Poland – 5.75% and hawks of the speech of the NBP president Adam Glapiński propose that the ft reductions will be delayed.

Summary

January data indicates a weakening of the economical situation in Poland, especially in the services, construction and retail sectors. The situation is improving in the euro area and the EU, which could have a affirmative impact on the Polish economy. At the same time, the Polish zloty is undergoing a historical consolidation, which is due to a number of external and national monetary policy factors. In the following months it will be crucial to follow trends in the global economy and the decision of the National Bank of Poland regarding interest rates policy.

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EC issued a communication on the Polish economy

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